Shattered Glass Ceiling: Indian Female Executives Thriving In Banking Industry, But Ordinary Women Need Greater Access To Loans

Women are making significant advances in at least one important industry in India, a country where females have long suffered second-class status and far worse treatment: the banking and financial services sector. Last October, the government-owned State Bank of India (NSE:SBIN), which is the country's biggest bank by assets and controls about one-fifth of India's total banking assets, named Arundhati Bhattacharya, a former chief financial officer, as its chairwoman. She became the first woman to hold the top post in the bank's 200-plus-year history.

Even before Bhattacharya's historic appointment, women have already reached the top position of other major Indian banks. Among prominent public-sector (state-owned) banks, Vijayalakshmi R. Iyer serves as chairwoman and managing director of Bank of India (BSE:BOI); Archana Bhargava is the boss at United Bank of India (NSE:UNITEDBNK); while Shubhalakshmi Panse reigns as chairwoman and managing director of Allahabad Bank (NSE:ALBK). According to Business Today, an Indian publication, state-owned banks headed by women control 45 percent of all of India's public sector bank deposits and 50 percent of all loans.

Within the private sector, Chanda Kochhar is chairwoman and managing director of ICICI Bank (NYSE:IBN), India's largest private bank and second-largest of all banks by assets; while Shikha Sharma heads the Axis Bank (NSE:AXISBANK). In addition, Indian women lead the local subsidiaries of foreign-based banking giants like JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), Bank of America Corp. (NYSE:BAC) and Royal Bank of Scotland (LON: RBS).

Furthermore, the managing director and chief executive officer of India's National Stock Exchange -- the biggest bourse in the country -- is Chitra Ramkrishna, also a woman. Finally, the Reserve Bank of India -- the nation's central bank -- has had three women deputy governors in its recent history: Shyamala Gopinath, K.J. Udeshi, and Usha Thorat.

Women are prospering in India’s banking and financial industry for a number of reasons, including efforts by the industry itself to attract more women and the perceived “suitability” of women working in an office, among other factors. Dr. Swati Piramal, a non-executive director on the board of ICICI Bank and vice-chairwoman of Piramal Enterprises Ltd. (NSE:PEL), explained that females are quite suited to the banking profession. "Women tend to be more conservative, more structured, more careful about money, good leaders and better team players," she told the Economic Times. Similarly, Arun Duggal, chairman of Shriram Capital and a longtime international banker, stated: "Banking requires sound instinct and intellectual capability to analyze businesses. I feel women are better at it than men." Also, a career in banking offers women “the opportunity to better balance their family and professional careers," added Duggal.

Banking also allows women to work in a profession that is not encumbered by masculine stereotypes. "Unlike [say] in manufacturing, banking in a way did not have a shop floor [and therefore no problem of women having to do night shifts]," K. Ramkumar, executive director at ICICI Bank, told the Economic Times. "Much of the selling in the financial services industry, until retail exploded in the past 10 years, was done [by] meeting people in offices."

Banks also started to open up to women earlier than other sectors of the Indian economy. "The number of senior women bankers that you see today is a testimony to that," said Madhavi Lall, head of group employee relations at Standard Chartered Bank. Women also excel at networking and are very performance-oriented, said Puneet Singh of Heidrick & Struggles, a global executive search firm. "This is one reason why women are successful at the top level in banks," she noted.

Still, this journey has taken a long time, with many struggles along the way. Business Today noted that after the nationalization of Indian banks in 1969, almost three decades would pass before a woman ascended to the top spot of a large bank – when, in 1996, Tarjani Vakil was named chairwoman of the Exim Bank, thereby becoming the first woman to lead any large bank in India. A few years later, in 2000, Ranjana Kumar became chairwoman and managing director of Indian Bank (NSE:INDIANB), making her the first woman to ever lead a public-sector Indian bank.

Vakil explained to the BBC that in the 1970s, as India’s nationalized banks expanded, so did the country’s middle class, which included a new generation of ambitious, well-educated women. "Women joined because it was a dream job for them," she said. "Banks were well organized. It was a safe place to work, because you didn't have to go to a factory, so the family didn't object. Women went to the office, sat in an air-conditioned office, and were very happy. It was glamorous, and money is always glamour."

But even now women still have a lot of ground to cover in an industry that has welcomed them. Citing data from executive search firm EMA Partners International, the Economic Times reported that in India only one in 10 companies across all industries have a woman at the top of the corporate structure – and more than half of these are engaged in the financial services sector.

As in Western corporations, Indian businesswomen feel they have to perform above and beyond the standards for men in order to advance and ultimately shatter the glass ceiling. "You need to have [high] knowledge levels and you need to work 10 times harder than your male colleagues to prove yourself," United Bank of India's Bhargava told Business Today.

Kochhar of ICICI told the BBC that women executives in India rise to the top purely on merit and must make sacrifices to succeed. "When you have an organization that is gender-neutral, and when you have a woman who is willing to give to her job whatever it takes, whether it's long hours, whether it's commitment to travel, irrespective of the fact that she's a woman, I think women get that opportunity to rise," she said. "What it required on my part was to really give to the job whatever it took. So yes, there were children at home, but if the job demands travel, hard work, long hours of work, I think you need to give it."

But on a happier note, Bank of India's Iyer observed: "Once they [male colleagues] know that here is a person [female] who is good, the sailing becomes very smooth."

One distinct advantage that Indian women in the professions enjoy over their Western counterparts is that they don’t have to worry as much about child care – most young Indian mothers can leave their kids at home in the care of grandparents or other relatives who live with them, whereas a rising female executive in London or New York must often deal with costly child care services when they go to work. In addition, virtually all middle-class women in India have (or can easily hire) domestic help to work for them at household duties.

But now comes the hard part – having climbed to the summit of India’s banking hierarchy, these women have to perform. State-owned banks in India are currently facing a multitude of problems, placing enormous pressure on their chief executives – female or male. Business Today reported that many state banks suffer from falling profits and large pools of non-performing assets. Bhattacharya of State Bank of India has stated her main thrust will be to deal with its bad loans – which amounted to 2.91 percent of total loans at the end of September 2013, the highest such level in four years. Iyer's Bank of India is also marred by bad loans on its books (2.35 percent of loans for 2012/13), while its capital adequacy ratio of 11.02 percent is the lowest among all Indian large banks. Also, Bhargava's Allahabad Bank had a non-performing asset percentage of 3.19 percent of total loans.

Business Today also reported that women bank CEOs will seek to make public-sector banks more appealing to female customers and employees who tend to favor private banks. As in the U.S., public-sector companies in India pay less than private-sector peers. "We do not always have a very level playing field in terms of pay structures," Bank of India's Iyer admitted.

Despite the success of high-profile women like Iyer and Bhattacharya, female bank employees face many hurdles in climbing the corporate ladder. Business Today noted, for example, that Indian women often turn down promotions if it means transferring to another location and disrupting their family life. "The ratio [of women joining at the entry level] has already become much better... The only thing we have to ensure is that these women stay the course and don't leave," said Bhattacharya.

In 2010, a government-appointed committee led by former Bank of Baroda chairman and managing director Anil Khandelwal released a report revealing that females accounted for just 17 percent of employees in India's state-run banks, and that only 2.7 percent were in executive positions. "Most women quit mid-way. Quitting does not mean resignation, but [rather] quitting the career itself," said Khandelwal to Business Today. "With counseling, I could persuade some women, but there are times when they also need mentorship and confidence."

But some women bankers have proven their mettle – that they're just as tough and formidable as men. For example, Bhargava of United Bank of India had to deal with hostile unions when she took over a branch office in Mumbai in 1998. "Though initially it was very tough for me to grapple with them, it really was a turning point because it brought out the best in me," she told Business Today. "There is higher acceptability today of the fact that a woman colleague can earn as much, or even more, and can be more competent and more capable. All that is making a big change."

Indeed, Khandelwal and others believe more women will opt for banking careers in the coming years. "Even in general banking, women with a finance background are coming in and they want to pursue their careers," he noted. Ananthasubramanian herself is optimistic that more Indian women will rise to the top of state-owned banks. "The pipeline should have a lot of youngsters coming in now," she said. "I am sure it will happen. Maybe not immediately, but in the next 10 years or so."

ICICI in particular has been hailed as a pioneer in encouraging women to become executives. According to LiveMint, fully one-third of ICICI’s current workforce are women. "There's no substitute for meritocracy and there's no substitute for hard work," Sharma of Axis Bank told BBC. "But there is the issue of women having the belief that they can make it, and everybody in society becoming sensitive to the fact that women can make it." P. Vaidyanathan Iyer, the editor of the Mumbai edition of the Indian Express, believes that other industries in India will follow the lead of the country’s financial service sector in diversifying their workforce to include more women managers and bosses. "I'm sure in the next few years, or the next decade or so, you will have women doing very well in sectors like health care and information technology, where we have a middle ground now of very successful and bright women in the middle-corporate levels,” Iyer told BBC. "These are areas where we have built a huge workforce of women, and it won't be surprising that you will find more chief executives."

Meanwhile, India appears to have made more progress with bank CEOs than even the United States. Consider that of the 10 biggest banks in the U.S. by assets, not one has a woman as boss. Anna Danielova, associate professor of finance and business economics at the DeGroote School of Business in Hamilton, Ontario, said top managerial positions in the U.S. and Canadian banking industry remain male-dominated. “My educated guess for the disparity would be the higher degree of competition to get into the business to begin with,” she said in an interview. “Only the cream of the crop of MBAs or [finance] students manage to get jobs on Wall Street. Furthermore, banks demand extremely long hours – as much as 80-100 hours per week. Perhaps this is less feasible for women who are balancing career and families.”

In November 2013 another related milestone was achieved when India introduced its first state-owned all-women bank, the Bharatiya Mahila Bank in Mumbai. The Indo-Asian News Service reported that no less a figure than Prime Minister Manmohan Singh attended the inauguration ceremony of Bharatiya Mahila Bank (which means Indian Women's Bank). Finance Minister Palaniappan Chidambaram had earlier promised in his budget speech that the New Delhi government would provide an initial investment of 10 billion rupees ($161 million) to help launch the Mahila bank.

With six other branches across the country also established, including in the cities of Kolkata, Ahmedabad and Chennai, Mahila Bank is expected to have 25 branches by March 2014, said Chidambaram, who also attended the bank’s debut. Within four years, the bank projects having 500 branches across India, including in the woefully under-served rural areas. The bank's chairwoman and managing director is a banker named Usha Ananthasubramanian, the former executive director of the Punjab National Bank (NSE:PNB), India’s second-biggest state-run lender by assets. The Mahila bank’s board of directors comprises eight women, while a majority of the staff is female.

Voice of America reported that the bank is also designed to offer women easier access to accounts and loans – thereby helping poor, disadvantaged rural women (many of whom lack identification cards that most mainstream banks require), as well as women entrepreneurs. For instance, the Mahila bank will offer women loans of up to $5,000 to fix up their homes or start small businesses, even if they have little or no collateral. The bank will also accept deposits from men but will not offer them loans.

“Women in India are smart and intelligent and great at cutting corners and saving, but they have traditionally shied away from formal channels of banking and finance,” Ananthasubramanian told Time magazine. “We want to bring in financial literacy among Indian women, which is very important for empowerment.” Time reported that unlike the microfinance programs that have proliferated across South Asia (with varying degrees of success), Mahila is a “proper universal bank.”

However, at the bank's inauguration, Prime Minister Singh spelled out the obstacles women in India encounter with respect to loans and finances. "The sad reality is that women in India face discrimination and hardship at home, at school, at their place of work and in public places,” he said. “Their social, economic and political empowerment remains a distant goal… They score below men in literacy, in health status, in employment potential, and in entrepreneurial skills.” Singh added that while India has produced many accomplished women leaders in a diverse range of areas -- science, medicine, business, sports, politics – these achievements do not reflect the “average reality” of women in the country.

VOA noted that in India's deeply patriarchal society, men control most financial assets, while an estimated three-fourths of women have no bank accounts at all. "Since fewer women than men have bank accounts, fewer women are able to get loans,” said Chidambaram at the bank's launch, Reuters reported. “Per capita credit in the case of women is 80 percent lower than in the case of men. Hence the need for a bank that predominantly serves women -- from the self-help groups to the small business women and from the working woman to the high net worth individual."

The prime minister also expressed his cautious hopes about the bank. "I am also sure that [the Mahila bank] will particularly benefit women from the less privileged sections of our society,” he said. “The fact that it will be run largely by women will serve as an example that, given the opportunity, women are capable of taking on challenging tasks... Access to finance and banking not only helps empower women but also broadens the social base of development, thus fostering equitable growth. This is an area in which India lags far behind."

But, given the inherent gender inequalities in India, some women’s rights activists worry that Mahila Bank will not really improve things for Indian females. “There’s no big thinking behind this. These initiatives have no gender perspective, they are just women-specific initiatives that isolate women even more,” Ranjana Kumari, director of the Centre for Social Research, told Time. “I would rather the government sensitizes normal banks to support women’s economic empowerment.”